Editorial: Oregon Tax Drama Resumes

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regon is credited — or blamed — with inventing the weight-distance tax, back in 1947, as a way of collecting revenue from truckers. Eventually it was adopted by nearly two dozen other states.

American Trucking Associations has fought ton-mile taxes for more than two decades, in the process scoring major victories, notably the precedent-setting decision by the U.S. Supreme Court in 1987 that a key component of many such taxes discriminated against interstate trucking.

The component — an alternate form of taxation used by in-state truck operators — amounts to a “flat” tax that could favor those same truckers, the high court of the land declared.

Oregon offers a flat-rate option to its mileage- and weight-based tax, and ATA focused on this fact in convincing an Oregon appeals court to rule the option unconstitutional. ATA won that round in 2003, and had reason to hope that Oregon would dismantle its entire ton-mile tax system — probably replacing it with a diesel fuel tax and higher vehicle registration fees.

ut state leaders are loath to throw the baby out with the bath water. The Oregon Supreme Court last week heard their appeal.

Fighting weight-distance taxes can place a state trucking association in an awkward stance. Members who benefit from a lower tax burden, which the courts agree is the discriminating feature of flat taxes, have no reason to seek change. These tend to be small, in-state carriers. In Oregon’s case, farm truckers and haulers of sand, gravel, logs and wood chips exercise the flat-tax option.

On the other hand, many interstate carriers — and state associations want more of these as members — have developed a visceral hatred of ton-mile taxes over the years. It is the most paperwork-intensive of the tax systems, and that’s not counting the fairness issue when tax burdens are not proportional.

Oregon Trucking Associations, demonstrating a certain courage, convinced legislators to abandon the ton-mile tax in 1999. Unfortunately, the regional AAA chapter, in its anti-trucking pique, then convinced voters to reinstate the tax through a ballot measure.

It doesn’t matter that all but three other ton-mile states (Kentucky, New Mexico and New York) have jettisoned the unwieldy, and arguably obsolete, apparatus since ATA launched its campaign. Oregon clings fiercely to its creation.

So the courtroom drama will continue. And it probably won’t conclude within the state’s boundaries. Oregon officials have declared they will “vigorously defend” the tax to the last lawyer. Which is to say, a betting man might wager that the case ultimately will be decided by the U.S. Supreme Court, years from now.

This editorial appeared in the May 16 print edition of Transport Topics. Subscribe today.